The U.S. trade deficit grew to a more-than-expected $36.5 billion in September, and 60.5% of the deficit was to China alone, writes Justin Fox for TIME. The U.S.-China economic relationship won’t be resolved anytime soon because of U.S.-based corporations selling products that were partly or entirely made in China. The more important fact, however, is that there is no way to ignore a rising political and military power like China. (Reasons to watch China).

The trade model between China and the United States remains unchanged, with China keeping the yuan artificially low and focusing on its export industries while the United States incurs a higher trade deficit and more debt, remarks Mark Trumbull for The Christian Science Monitor. (Is a strong Chinese yuan a good thing?)

Obama has not shown any pushback against China’s seemingly non-free market policies, despite promises on a tougher stance on China. However, economists are doubtful that any pushback would occur, citing several reasons:

• The tougher approach could result in higher-priced goods for U.S. consumers and the protectionism would rapidly spread to other nations, putting up trade barriers.
• China’s manufacturing power is not slowing one bit.
• An adjusted yuan won’t necessarily help U.S. manufacturers.
• The United States doesn’t have much leverage on China since China is the country’s main lender.

U.S. trade representative Ron Kirk stated that the United States wants trade and investment barriers removed to promote an open global trade system and Obama wants the United States to pursue “pragmatic cooperation” with Beijing, according to BBC News. Obama also urged Asian countries to break away from their dependence on exports and pursue “balanced,” sustainable growth.

For more information on China, visit our China category.

• iShares FTSE/Xinhua China 25 Index (NYSEArca: FXI): up 58.2% year-to-date

• SPDR S&P China (NYSEArca: GXC): up 66.8% year-to-date

• PowerShares Golden Dragon Halter USX China (NYSEArca: PGJ): up 65.9% year-to-date

• Claymore/AlphaShares China Small Cap (NYSEArca: HAO): up 96.5% year-to-date

• Claymore/AlphaShares China All-Cap ETF (NYSEArca: YAO): recently launched

Max Chen contributed to this article.

The latest ETF from Index IQ is another passageway for investors to take an alternative route to diversification within their portfolios. The ETF MNA is designed to give investors exposure to global corporate merger & acquisition activity, which is rapidly increasing. (More ways to play mergers and acquisitions).

Index IQ CEO Adam Patti says that, “It’s pretty well recognized that M&A activity has increased significantly this year and is expected to continue pretty rapidly.” He notes that a lot of non-financial companies have a lot of cash on their books. That, combined with a low-interest rate environment, could spark even more activity.

“Depending on what sector you’re looking at,” Patti says, “there are a lot of bargains out there.”

MNA seeks to provide capital appreciation by investing in global companies for which there has been a public announcement of a takeover by an acquirer, a strategy generally known as “merger arbitrage.” This strategy generally seeks to take advantage of any price differential between the current trading price of a stock and the price of that stock at the time the deal is completed.

The product will rebalance monthly, and it’s a 100% rules-based ETF.

For more stories about New ETFs, visit our New ETFs category.

• With a surge in domestic consumption bolstered by optimistic Brazilians, low unemployment and increased wages, Brazil’s economy is projected to grow 9% for the fourth quarter, comments Martin Denholm for Investment U.

• For the full year, Brazil’s GDP is projected to fall between 1% and 1.5% after a major blow to its export market, but the market has shown signs of revival. (Brazil getting lift from China).

• Deputy Trade Minister Welbar Barral expects foreign direct investment to grow 33% in 2010. Moody’s already brought Brazil’s credit rating to investment grade back in September. (Is there an emerging market bubble?)

• Labor Minister Carlos Lupi stated that Brazil’s economy added 230,956 payroll jobs in October, bringing the number of jobs added to more than 1 million this year, reports Isabel Versiani for Reuters. He also expects the number of new jobs will rise to 2 million in 2010. (Brazil’s growing middle class)

• Lupi projects the economy will grow 2% in  2009 and 7% to 8% in 2010 while analysts estimate growth of 0.2% in 2009 and 5% in 2010.

For more information on Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 121% year-to-date

• Market Vectors Brazil Small Cap (NYSEArca: BRF): up 35.1% in the last three months

Max Chen contributed to this article.

The broad market rally that began March was initially led by small-caps, but a shift has given  large-caps a place in the spotlight. What happened?

• Donna Kardos Yesalavich for The Wall Street Journal reports that small-caps were hit the hardest on the way down, because of the perception they are risky, given their lower liquidity, lack of international exposure and higher trading volatility. (Reasons why both large and small-cap ETFs can round out a portfolio). As a result, small-caps got so cheap that investors snapped them up in droves. The interest drove prices back up to their highest valuations since 1996, putting large-caps back in favor.

• Large-caps may also get a boost from their stability, something investors are still seeking as the markets recover. (Read about the small cap ETF rally here). As a result of the shift, John Spence for The Wall Street Journal notes that the iShares Russell 2000 Index Fund (NYSEArca: IWM) saw $1 billion in outflows in October. It brought in $2.2 billion in the previous three months.

• Profits for smaller companies are also expected to be slower in the fourth quarter, reports Lynn Thomasson and Sapna Maheshwari for Bloomberg. Earnings from small companies are projected to increase 38%, about half as fast as S&P 500 income. (Ways to play a large-cap rally.)

For more stories about asset class ETFs, visit our asset class category.

• SPDR S&P 500 (NYSEArca: SPY): up 23.6% year-to-date

• S&P 500 Growth (NYSEArca: IVW): up 28.3% year-to-date

• S&P Small Cap 600 (NYSEArca: IJR): up 17.7% year-to-date

• S&P Small Cap 600 Growth (NYSEArca: IJT): up 20.2% year-to-date

All three major indexes – the Dow Jones Industrial Average, the S&P 500 and the Nasdaq – have hit new intraday highs for 2009. The move was sparked by growth in Japan, a rally in energy and a positive report from the retail sector. Federal Reserve Chairman Ben Bernanke also spoke this morning to say that the central bank would monitor the value of the dollar as they keep rates at record lows. (Is it time to stick a fork in the dollar?). The SPDRs (NYSEArca: SPY) are trading up about 1.5% this morning.

October retail sales made a surprise 1.4% gain on the strength of auto sales, reports Martin Crutsinger for the Associated Press. While the report is just what the markets needed after dismal September figures, analysts are still concerned about consumer spending in general. After all, unemployment is still sky-high, incomes are stagnating and credit remains constricted. Consumer Staples Select Sector SPDR (NYSEArca: XLP) is up about 1% this morning.

UPS (NYSE: UPS) is projecting that it will move about 22 million packages this year on its busiest day, Dec. 21. The volume is slightly higher than what it was in 2008. The number will match the previous record forecast, which was set in 2007, reports Mary Jane Credeur for Bloomberg. iShares Dow Jones Transportation Average (NYSEArca: IYT) is up about 2.5% this morning. (For more stories on transportation, visit our category).

]]> http://www.etftrends.com/2009/11/midday-market-update-indexes-hit-intraday-highs.html/feed/ 0 http://www.etftrends.com/2009/11/what-makes-revenueshares-etfs-different.html http://www.etftrends.com/2009/11/what-makes-revenueshares-etfs-different.html#comments Sun, 15 Nov 2009 21:00:28 +0000 Tom Lydon http://www.etftrends.com/?p=20570 In an effort to differentiate itself from competitors in its line of exchange traded funds (ETFs), RevenueShares has opted to focus on factors that determine the health of a company in the long run.

As the name might imply, revenue is the end-all, be-all in RevenueShares ETFs. Most ETFs weigh holdings by market capitalization, but RevenueShares weighs stocks based on sales, reports Alexandra Zendrian of Forbes.  Its funds are rebalanced once each year on Sept. 30, because quarterly rebalancing could lead to too many fluctuations.

Why revenues? Because it’s a number that’s difficult to fudge.

Dividends can be adjusted, earnings can be moved around by taking writeoffs and doing fancy accounting. The provider feels that revenues are simply a more consistent number to look at.

Another reason the provider has gone with revenues is because all companies have a revenue.

The provider says all of its funds are beating their underlying indexes year-to-date, RevenueShares Small Cap Fund (NYSEArca: RWJ) being the best performer. (More on revenue-weighted ETFs).

For more stories on asset class ETFs, visit our asset class ETF category.

Some of RevenueShares ETFs include:

• RevenueShares Large Cap Fund (NYSEArca: RWL): up 26.3% year-to-date

• RevenueShares Mid Cap Fund (NYSEArca: RWK): up 44% year-to-date

• RevenueShares Small Cap Fund (NYSEArca: RWJ): up 36.7% year-to-date

Kevin Grewal contributed to this article.

Emerging Global Shares has filed to launch a group of ETFs aimed squarely at the BRIC economies, according to Cinthia Murphy for Index Universe:

Emerging Global Shares INDXX India Infrastructure Index Fund

• Emerging Global Shares INDXX India Infrastructure Index Fund
• Emerging Global Shares INDXX China Infrastructure Index Fund
• Emerging Global Shares INDXX Brazil Infrastructure Index Fund
• Emerging Global Shares INDXX India Mid Cap Index Fund
• Emerging Global Shares INDXX China Mid Cap Index Fund
• Emerging Global Shares INDXX Brazil Mid Cap Index Fund
• Emerging Global Shares INDXX Growing Asia Large Cap Index Fund

Every single company within these funds will have no more than a 10% weighting. Net operating expenses are pegged at 0.85% for each fund. ALPS Advisors is the advisor for each fund, with Emerging Global Advisors LLC the subadvisor. (Read about the widening wealth shift between the United States and emerging markets).

Each fund will invest in securities, ADRs and GDRs of various companies to replicate their respective indexes. A fully replicating strategy will be used to assemble the funds, however, representative sampling may be used, if needed. (The ultimate guide to the BRIC ETFs). You can read the prospectus for the funds here.

The BRIC economies have been standouts this year as the world recovers from the global financial crisis, gaining about 110% since the market’s low. Russia has been one of the strongest, gaining 137% year-to-date. Brazil has gained 117%, China is up about 60% and India has added about 90%.

For more stories about BRIC ETFs, visit our BRIC category.

The Dow is the average of the value of one share each of 30 of the largest companies in the United States, writes Trent for The Simple Dollar.

The Dow Jones & Company uses a scaled average, in which they keep track of past splits and multiply the values of each share. In this way, the Dow average is maintained despite any changes to market value of company shares – the most common change being share splits. Trent summarizes the Dow as a “quick summary of the current value of shares of 30 large companies.”

The value of shares depends on supply and demand. However, information about the economy or a specific company also play a key role in causing shifts to supply and demand.

Investors tend to buy/sell depending on future expectations. Therefore, the value of the Dow often decreases before poor economic news, such as the unemployment rate. The value of the Dow often increases before auspicious economic news. If there are any signs that the economy is slowing or accelerating even a bit, the Dow will fall or rise, respectively. (Grim unemployment numbers).

Trent urges investors to only “look at the the Dow as a predictor,” in that the Dow may predict the general direction an economy is leaning toward. (Dow hits yearly high).

For more information on the Dow, visit our Dow Jones Industrial Average category.

• DIAMONDS Trust, Series 1 (NYSEArca: DIA): software 2.0%, industrial materials 22.6%, energy 11.1%, hardware 16.3%, media 2.1%, telecommunications 4.5%, healthcare 8.7%, consumer services 16.7%, financial services 11.6%, consumer goods 10.4%

• iShares Dow Jones U.S. Index (NYSEArca: IYY): software 4.6%, industrial materials 11.1%, energy 11.3%, utilities 3.8%, hardware 9.8%, media 2.6%, telecommunications 5.8%, healthcare 12.2%, consumer services 8.6%, business services 4.3%, financial services 15.6%, consumer goods 10.1%

Max Chen contributed to this article.

Chinese factory output growth surged to a 19-month high in October. China, the world’s third-largest economy and a voracious commodities consumer, is widely considered a driver in a global economic recovery, reports Luciana Lopez for Reuters. The numbers gave investors the confidence they were seeking to move toward greater emerging market risk.

President Luiz Inacio Lula da Silva is confident that Brazil’s economy will grow by 5% in 2010 and expects foreign reserves to reach $300 billion, further signaling a recovery for the Latin American country, reports Alex Lawler for Reuters .(Why Brazil is worth considering).

Brazil’s strong pace of recovery is another signal that the rapidly growing country has emerged from a recession; it posted 8%-10% growth in the third quarter, reports Industry Week. (Read about how Brazil’s middle class will help to benefit ETFs).

For more stories about Brazil, visit our Brazil category.

• iShares MSCI Brazil Index (NYSEArca: EWZ): up 120.8% year-to-date

• Market Vectors Brazil Small Cap (NYSEArca: BRF): up 29.5% since inception

International dividend ETFs can provide decent yields and remove the need to do research on foreign stocks. Instead of trying to pick foreign holdings on limited information, there are funds that have pulled together some high-quality, dividend-paying companies that you can hold in a basket, thus spreading out the risk. (See why dividends have outperformed growth this year.)

Todd Shcriber for Investopedia reports that ETFs that hold high-quality stocks with reliable dividend histories that focused on sectors that are typically viewed as safe dividend bets. (Why dividend ETFs are good for tough times).

For more stories about dividends, visit our dividend category.

Among the many available are:

• WisdomTree International Utilities (NYSEArca: DBU): yield 9.89%; Utility funds can be a good bet no matter where you are, because there is always a need for the services utilities provide. These companies tend to pay out steady dividends that are predictable.



• WisdomTree International Large Cap Dividend (NYSEArca: DOL): yield 8.04%; This ETF does not focus on one sector, rather it tends toward large, high-quality dividend stocks. It is a thinly traded fund, but has nice performance. Countries ranging from China to Brazil are featured in this ETF, both hot spots.



• iShares S&P Global Telecommunications (NYSEArca: IXP): yield 5%; Telecom stocks are another sure play as they are indispensible and growing. This is not as international a play as the other two funds, as AT&T and Verizon are in the top 10 holdings. Nevertheless, the ETF contains quality names across the world.